Tax

Would you be more willing to pay taxes if you didn’t have to spend hours doing it, or if you see that money being used in the right way? Well, you are not alone.

Armenians, like people around the world, feel the same. According to the recently conducted Tax Perception Survey in the country, easier tax compliance and more visible link between taxes paid and public services received was found to be particularly important.

Between 66 percent and 75 percent of respondents said they would be more willing to pay more taxes if the procedures were easy and less time-consuming, if they saw more useful social and other public services, or if they saw less corruption.

Over 95 percent of respondents felt the tax burden is heavy or very heavy, while almost 50 percent reported that evading tax payments was not justified under any circumstances.

About 57 percent noted that high taxes or desperate financial situations were the main reasons for avoiding or evading tax payments.

The data unveiled by the latest Tax Perception Survey, carried out with USAID support and World Bank Group technical assistance covered around 1,500 households and 400 business taxpayers. The analysis strengthened the need to modernize the tax system, which has remained a major challenge for Armenia. Despite Armenia’s ranking as 37th in Doing Business, the taxation system, at 103rd on the list, still requires a lot of work.

To be sure, there have been some improvements to the system in the past few years. They include the introduction of electronic filing of tax returns, e-government applications, risk-based audit principles, and taxpayer service centers and appeal system. These achievements contributed to increasing the tax to GDP ratio from 19.5 percent in 2010 to 22.8 percent in 2013.

But much remains to be done to further streamline and simplify tax procedures, modernize the tax administration, and enact a tax code.

The idea of a peer learning network for tax administrators came when I realized that tax authorities in different countries had many of the same questions: How do we initiate risk management? How are other countries dealing with compliance issues? How do countries ensure speedy VAT refunds and yet prevent fraudulent claims? And so on.

So why not get the tax officials from different countries together and provide a platform to discuss their challenges, experiences and innovative ways of solving problems. Mix them with a dose of tax experts from developed tax systems, et voila! That’s how TAXGIP (Tax Administrators eXchange for Global Innovative Practices) was born – it provides opportunities to exchange knowledge and good practices, and share experiences.